Pricey cricket

“A cricketing event is the best way to create and sell brands,” asserts advertising expert Santosh Desai, MD, Future Brands. A lot of advertisers and media planners would agree that cricket provides brands the best returns on advertising investments.

“A cricketing event is the best way to create and sell brands,” asserts advertising expert Santosh Desai, MD, Future Brands. A lot of advertisers and media planners would agree that cricket provides brands the best returns on advertising investments.

Year 2011 is indeed the year of cricket. Starting with India’s exciting ICC Cricket World Cup 2011 win, followed by the Indian Premier League 4, played among 10 teams, followed by a bunch of cricket tournaments across the year, right up to December, the ad money going into cricket this year is expected to break all previous records.

In spite of an estimated 15% rise in ad budgets this year, there is talk of other TV shows and genres getting squeezed on ad investments, with cricket attracting more of the ad money. 2011 has seen the most expensive ad slots by far on major cricketing events.

For the World Cup this year, official broadcaster ESPN-Star Sports hiked up the spot rates to record levels, followed by SET Max, the official broadcaster of the Indian Premier League. A 10-second ad spot during the World Cup India-Sri Lanka final came for a whopping Rs 35 lakh, up from Rs 18 lakh during the semi-final matches.

During IPL 4 too, despite apparent viewer fatigue (reflected by plunging viewership), controversies over the format and player commitment, the advertiser’s interest remained high. SET Max sold its 10-second spots for Rs 15 lakh each against the last season’s Rs 9 lakh.

The way too-expensive ad rates have created concerns among media planners about the size of the remaining ad budgets for the next three months.

“The year’s expensive cricketing has burnt the pockets and budget appetites of various brands,” said Jai Lala, principal partner, The Exchange, Group M.

“A huge chunk of the budgets were spent on a tried and tested format: cricket. Now, the worry is the economic slowdown resulting in compressed or non-alterable ad budgets for the remaining months,” said Santosh Sood, media consultant and a former CEO of Rediffusion Y&R.

There is also a cautious wait and watch happening among advertisers on where to put the remaining budget or whether to wait for the cricketing events at the end of 2011.

“Who will count the bunch of defeats against West Indies, England and few others too? The ad slots were expensive but the returns on investments, in these cases, were negligible,” Desai pointed out.

“Companies have invested huge money in cricketing ad-spots at record high rates. The major concern, critically, is on returns on investment,” echoed Amit Tiwari, country head (media), Philips India.

Out of the total ad budget in a year, 60% of the budget is allocated to TV, especially cricketing events. In a World Cup year, the budget exceeds 70%.

Even as many advertisers increased their advertising budgets this year, seeing opportunity in cricket, some prominent non-cricket events and TV programmes are finding the going tough on garnering advertising and sponsorship commitments currently.

According to media buyers, traction with brands for global racing biggie, Formula One, is limited despite the ad spots coming for only a fraction of what prime cricket events command. Advertisers, it appears, are not in the mood to bet on the new format; they want to play safe with the year’s already squeezed remaining budget.

“There are a couple of interesting cricket tournaments lined up for later this year. This is making many advertisers adopt a wait and watch policy and re-check the interest and deliverability power of the Formula One,” said Sood.

Not only Formula One, Bigg Boss 5 was hunting for sponsors a week before its official telecast. Bigg Boss, an entertainment show on general entertainment channel, Colors, is well known for huge advertiser traction — sponsors normally sign on a month before the programme begins telecasting. “This time the channel had locked only four sponsors out of the total eight it wanted till almost a week before its telecast,” said a media buyer on condition of anonymity.

Reportedly, electronics major LG withdrew from Bigg Boss 5. “Non-stop cricketing this year has offered brands an opportunity to plan ad investments. We are now more focused on ad-spots instead of sponsorships that sometimes block money for longer durations,” said LK Gupta, chief marketing officer, LG.

A Colors spokesperson, however, denied any diluted responses from advertisers on Bigg Boss 5, for which it roped in Bollywood actors Salman Khan and Sanjay Dutt.

Amid the concerns, some brands believe advertising during cricket matches is an important investment strategy which cannot be replaced or reduced. “The brands that were associated with cricket over a longer period of time will reap better and higher returns on their investments, with the negative effects of some poor playing on the Indian cricket team’s part being negligible. The year of pricey cricket ad rates may have hampered new or small brands’ plans for the year though,” said Vivek Sayal, former GM marketing of Hero Honda.

But new or small brands are not necessarily concerned. “We have purchased expensive ad slots with a theory of: let’s invest, forget the cost. Cricket is a game that creates brands and ensures the delivery of our message,” said Nipun Singhal, president, Lloyd, a re-launched electronics brand.